New Castle News

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March 25, 2014

Senate bill would freeze tax bills for seniors

NEW CASTLE — Some state senators want to freeze property tax rates for seniors, protecting them from costs that could force them from their homes, but at least one critic dismisses the move as a bid to curry votes.

A bill by Senate Majority Leader Dominic Pileggi, R-Chester County, calls for the state to reimburse schools money they would have received from tax increases on property owned by anyone age 65 or older. The bill does not explain how the state would pay for the tax freeze, but legislators have considered using revenue from the electronic lottery game Keno.

Eric Arneson, a spokesman for Pileggi, said lawmakers are still debating where the money should come from.

Retiree Pat Baylor of Lewisburg said the bill is necessary to help seniors afford to stay in their homes.

Baylor sheepishly admitted she and her husband, Eugene, didn't think to ask about property taxes when they retired to Union County from Maryland. They were startled to learn property taxes in their new home were three times as much as they'd paid for their last place, mainly because of school taxes.

Baylor said she's frightened about what will happen in the future as Lewisburg plans a new high school.

“I don’t doubt that they need a new school,” she said. “But I don’t think people can afford it. I think a lot of seniors are scared.”

Baylor said she empathizes with all taxpayers, but working people may be in a better position to bring home more money to deal with the increased burden than seniors on fixed budgets.

David Baldinger, administrator of the Pennsylvania Taxpayers Cyber Coalition, said freezing taxes for seniors seems more like election year pandering to a constituency that votes in large numbers.

Baldinger’s group is lobbying for legislation to replace all property taxes by increasing the sales tax. The group believes there is enough support in the Senate for the measure to pass, he said.

A total repeal effort couldn’t pass the House last fall, Arneson said, so legislative leaders have begun looking for alternatives.

Both the property tax repeal and property tax freeze for seniors would require the state to cover shortfalls.

The Tax Policy Center reports that Pennsylvania has the 13th highest property taxes in the nation.

Nine percent of property taxes come from homes owned by people 70 or older, according to the state Independent Fiscal Office. And the nature of a tax freeze is that the hole it leaves in the budget widens rapidly.

The state Independent Fiscal Office estimated last fall that within four years the state will need to find $200 million to cover the cost of the shortfall created by the tax freeze for seniors.

That amount will only grow every time a school district raises taxes, Baldinger said.

The state study also found that the plan supported by Baldinger’s group could result in a shortfall of $1 billion in education funding in just a few years.

No other state has ever successfully eliminated property taxes, Arneson noted, while others have successfully frozen property taxes for seniors.

Six states have frozen property taxes for seniors — Connecticut, New Jersey, Oklahoma, Rhode Island, Tennessee and Texas, according to the National Conference of State Legislatures. The state Lottery already provides millions of dollars in tax rebates for seniors.

Last year Lottery and slots revenue provided more than $282 million in rebates to more than 598,000 residents — an average rebate of $471.

The program provides rebates up to $975 for homeowners with annual incomes up to $35,000 a year, or renters with incomes up to $15,000.

(Email: jfinnerty@cnhi.com)

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